The financial crisis claimed another US law firm victim last week when 300-lawyer Philadelphia firm WolfBlock called time on its long history.
The financial crisis claimed another US law firm victim last week when 300-lawyer Philadelphia firm WolfBlock called time on its long history.
The partners at WolfBlock voted last Monday (23 March) to dissolve the firm. In a statement the firm said the decision to unwind had been reached as a result of “a confluence of unfavourable factors”.
These included the economic recession, particularly in WolfBlock’s core real estate practice, and the reduced availability of credit as a result of the ongoing banking crisis. The “intended and anticipated departure of significant partners and practices” was also to blame, the statement added.
“The partners concluded that continued efforts to finance the firm’s operations in the face of these obstacles was unwise and could risk greater harm later to firm clients and employees than if the situation were to be managed now in an orderly and responsible manner,” it said.
WolfBlock, which has been operating for 106 years, reported a fall in revenue last year of 8 per cent to $159.5m (£108.99m). According to legal consultant Bruce MacEwen, falling fee income was only part of WolfBlock’s problem.
“The firm lacked a sense of dynamism and also was seen to lack an outward-facing orientation,” MacEwen explains. “Strategic drift doesn’t inspire confidence in your partners, your clients, or your bankers. Couple this with the extremely short leash bankers are required to enforce with even remotely questionable borrowers, and you can imagine that what might have been seen as ordinary forbearance in more normal times wasn’t to be had.”
Last month, WolfBlock became one of the few firms to announce that it was cutting salaries for its associates. The firm reduced associate pay by 10 per cent across the board, but said its lawyers could make up the shortfall through merit-based bonuses. That is now academic, as WolfBlock will no longer exist within two months.
Brad Hildebrandt of consulting firm Hildebrandt International has been brought in by the firm along with Greenberg Traurig litigation partner Leslie Corwin to oversee the
wind-down.
WolfBlock is the fourth-largest US firm to disappear within six months, following the dissolutions of Heller Ehrman, Thelen and Thacher Proffitt & Wood.
